Need help with this question solution general accounting Aztec Products wishes to evaluate its cash conversion cycle(CCC). Research by one of the firm's financial analystsindicates that on average the firm holds items in inventory for65 days, pays its suppliers 35 days after purchase, and collectsits receivables after 55 days. The firm's annual sales (all oncredit) are about R2.1 billion, its cost of goods sold representsabout 67 percent of sales, and purchases represent about 40percent of the cost of goods sold. Assume a 365-day year. Whatis Aztec Products' cash conversion (CCC)?

Step 1: Define Cash Conversion CycleThe cash conversion cycle is the days taken by the company for…

Answered: Aztec Products wishes to evaluate its…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

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ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

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Aztec Products wishes to evaluate its cash conversion cycle (CCC). Research by one of the firm’s financial analysts indicates that on average the firm holds items in inventory for 65 days, pays its suppliers 35 days after purchase, and collects its receivables after 55 days. The firm’s annual sales (all on credit) are about R2.1 billion, its cost of goods sold represent about 67 percent of sales, and purchases represent about 40 percent of cost of goods sold. Assume a 365-day year. What is Aztec Products’ cash conversion (CCC)? If Aztec could shorten its CCC by 5 days, would it be best to reduce the inventory holding period, reduce the receivable collection period, or extend the accounts payable period? Why? How should the firm manage its inventory, accounts receivable, and accounts payable in order to reduce the length of its cash conversion cycle?
What is the length of loud noise recordings' cash conversion cycle (CCC) for this accounting question?
What is the length of harmony beats Inc's cash conversion cycle on these financial accounting question?
You have recently been hired to improve the performance of Multiplex Corporation, which has been experiencing a severe cash shortage. As one part of your analysis, you want to determine the firm's cash conversion cycle. Using the following Information and a 365-day year, your estimate of the firm's current cash conversion cycle would be __________days Current Inventory = P120,000. Accounts receivable = P157,808. Accounts payable = P25,000. Annual sales P600,000. Total annual purchases = P365,000. Purchases credit terms: net 30 days. Receivables credit terms: net 50 days. O 100 O 49 O 144 O 168
Q4: Aztec Products wishes to evaluate its cash conversion cycle (CCC). Research by one of the firm's financial analysts indicates that on average the firm holds items in inventory for 65 days, pays its suppliers 35 days after purchase, and collects its receivables after 55 days. The firm's annual sales (all on credit) are about $2.1 billion, its cost of goods sold represent about 67 percent of sales, and purchases represent about 40 percent of cost of goods sold. Assume a 365- day year. a. What is Aztec Products' operating cycle (OC) and cash conversion (CCC)? b. How many dollars of resources does Aztec have invested in (1) inventory. (2) accounts receivable, (3) accounts payable, and (4) the total CCC? c. If Aztec could shorten its cash conversion cycle by reducing its inventory holding period by 5 days, what effect would it have on its total resource investment found in part b? d) If Dean Muhammad Suppliers receive an invoice for purchases dated 12/12/2002 subject to credit terms of…
Romano Inc. has the following data. What is the firm's cash conversion cycle? Inventory Conversion Period = 59 days Receivables Collection Period = 19 days Payables Deferral Period = 41 days Please explain process and show calculations.
Your consulting firm was recently hired to improve the performance of RP Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis. you want to determine the firm's cash conversion cycle. Using the following information and a 365-day year, what is the firm's present cash conversion cycle? Average inventory Annual sales Annual cost of goods seld Average accounts receivable Average accunts payable P5.000 P00.000 PH0,000 P0,000 F5000 140.6 days 120.6 days 133.6 days 148.0 days O 126.9 days
What is the firm's cash conversion cycle?
Antonio is an analyst at Barrilla Group. The firm turns over its inventory 5 times each year. It has an average collection period of 50 days and an average payment period of 20 days. The firm’s annual sales are €12 million. Assume there is no difference in the investment per euro of sales in inventory, receivables, and payables, and assume a 365-day year.a.Calculate the firm’s cash conversion cycle, its daily cash operating expenditure, and the amount of resources needed to support its cash conversion cycle.b.Find the firm’s cash conversion cycle and resource investment requirement if it makes the following changes simultaneously.(1)Shortens the average age of inventory by 10 days.(2)Speeds the collection of accounts receivable by an average of 15 days.(3)Extends the average payment period by 5 days.c.If the firm pays 15% for its resource investment, by how much, if anything, could it increase its annual profit as a result of changes in part b?d.If the annual cost of achieving the…
C. Exodus Corp. is analyzing the performance of its cash management. On the average, the firm holds inventory 65 days, pays its suppliers in 35 days, and collects its receivables in 15 days. The firm has a current annual outlay of P1,960,000 on operating cycle investments. Exodus currently pays 10 percent for its negotiated financing. (Assume a 360-day year.) Calculate the following: a. Cash conversion cycle b. Operating cycle. c. Daily expenditure and the firm's annual savings if the operating cycle is reduced by 15 days.
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